Mills v. Kellogg

By the Cotvrt ElaNdbau, J. Nothing appears either in the pleadings or the admitted facts, to raise any question of homestead in the lands mortgaged, nor any other question, save whether the application of the several payments as made by the parties to the first incumbrance, is binding upon the subsequent incumbrancers. The Court below decided that it was, and we think the decision is correct. The counsel for the Plaintiffs in Error is mistaken entirely in supposing that the case of Whitacre et al. vs. Fuller et al., 5 Minn. R., 508, is decisive of this. There, the first mortgage was silent upon the rate of interest that the debt it secured carried, and we held that the subsequent incumbran-cers and bona fide purchasers, might presume that the debt bore but seven per cent., the legal rate. Here, however, the mortgage carries on its face full notice to all parties, who desire to invest on the security of the laud, that the debt bears an exorbitant rate of interest before maturity, and a greater rate as damages if not paid. A party taking a second mortgage under these circumstances, is aware that before and up to the maturity of the debt, the interest must be paid, no matter how high the rate, and that after the due date it may be paid by the debtor if he feels disposed to perform his agreement, and can only be avoided by him upon application to a court of equity for relief. “We have frequently held that money paid under such a stipulation cannot be recovered back, which involves the idea that the stipulation, until relieved against, is valid, or in other words, it is voidable but not void, at the option of the debtor. Mills has treated it as binding upon him, and complied with it except so far as the mortgagee agreed to lessen the rate of interest, and we think he has no cause to com [477] plain. Andrus & Bosworth are only interested in obtaining the amount of their liens out of the land, and nothing appears but that the land is amply competent to discharge them all. We can see no way in which equities could arise in favor of a second incumbrancer which would entitle him to relief against payments of this character, except in a case where the land was rendered inadequate to meet all its obligations by reason of the first being augmented by applying the payments to the interest, and even then, if there was a personal obligation resting on" the debtor to pay the debt secured by the subsequent lien, no equities could arise as long as the debtor remained solvent, and able to respond to a deficit after the sale of the land. "We do not mean to say that equities would arise in the case supposed, sufficient to overthrow the application^ of payments made as these were — we merely introduce it to show that they do not arise here. Judgment affirmed.